Influence of high commitment management on organisational performance: human resource flexibility as a mediator variable

Abstract

Tendencies such as the increasing spread of market globalisation, new technological developments, the reduction of product life cycles and aggressive competition, are generating high levels of environmental changes and uncertainty for organisations of all types (Volberda, 1996; Sanchez, 1997). These circumstances require rapid responses through adaptations of organisational attitudes and capabilities, which lead to innovative management approaches and organisational methods (Bueno, 1996: 262). <br/>Traditional sources of competitive advantages are changing and it is imperative to deploy new strategies to successfully compete under changing external conditions. For example, flexibility is emerging as a competitive weapon that allows organisations to counteract current market evolution and competitive levels (Ahmed et al., 1996; Volberda, 1996). Flexibility is a broad concept that can refer to operational issues such as manufacturing flexibility, or to strategic decisions such as alterations in the organisation's product-market combinations. All these factors are associated with the organisation's efforts to adjust available means to external challenges. Regardless of the specific response adopted by organisations, it is broadly believed that environmental dynamism forces managers to pay increasing attention to the management of the organisation's social issues (Wright and Snell, 1998). <br/>From a managerial point of view, human resource management activities used by organisations in the new competitive landscape are changing. This can be seen, for example, in job descriptions. Nowadays individual contributions to organisational goals are being substituted by team accomplishments. Furthermore, technological advances (e.g. the introduction of Internet in companies) are making it difficult to assess and manage employee performance in the workplace. As a result High Commitment Management (HCM) is emerging as the optimal system to manage the employment relationships in modern organisations. HCM is a particular approach to human resources management characterised by certain features such as the emphasis on the development of employee skills, job enrichment and the provision of equitable incentives. A number of authors in recent decades have demonstrated the impact of HCM on organisational outcomes. <br/>From an employee-based perspective, organisations require a new type and level of contribution from their workforce. In order to successfully compete under dynamic conditions, people's performance of a fixed set of prescribed tasks is no longer considered adequate. Instead, competitive advantage comes from employees who are engaged in broad open-ended and interdependent roles (Campbell, 2000; Parker, 2000). In sum, from an individual perspective, human resource flexibility is a key success factor in current competitive environments. However, to date no accepted definition of human resource flexibility has been put forward; attempts should be made to provide this concept with a more solid theoretical background (Looise et al., 1998). In this study, I propose a conceptualisation of HR flexibility based on the premises of the Resource-Based View of the firm (RBV) (Wernerfelt, 1984; Barney, 1991; Amit and Shoemaker, 1993). Similarly to the role that value, rareness, inimitability and non-substitutability play in the consideration of resources as strategic assets (Barney, 1991), flexible resources are characterised by certain features, such as their applicability to a variety of uses or the ease with which they can be modified (Sanchez, 1995). One of the aims of this research is to apply these concepts to the conceptualisation of human resource flexibility.<br/>All things considered, social factors are essential to the successful deployment of organisational flexibility, as are the activities used to manage employees (Dyer and Shafer, 1999). Not only are individual responsibilities different in dynamic environments, but also the human resource activities used by organisations to manage their workforce will alter. The present study focuses on these two questions and analyses their interrelationships.<br/>The general purpose of this research is to examine the contribution of HCM to organisational performance by considering the role that human resource flexibility plays in this relationship. That is, I question whether a high commitment approach is important to determine the workforce's flexibility and to what extent a flexible workforce enhances organisational outcomes.